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2020 Goals

ABOUT OUR SUSTAINABILITY GOALS

GREENHOUSE GASES (GHG)

In 2006 UTC established absolute greenhouse gas emission reduction goals measured by reference to baseline, succeeding energy-efficiency goals first implemented in 1997. In addition to the reduction of our impact to the global climate, we’ve proven that more efficient use of energy and reduced GHG emissions provide significant economic benefits to UTC. We are targeting a reduction of 15 percent in GHG emissions by 2020 compared to our 2015 baseline operations. This goal is a continuation of the 3 percent annual reduction target in place since 2006 and keeps UTC on a path consistent with the UN Intergovernmental Panel on Climate Change (IPCC) target of 80 percent lower GHG emissions by 2050.

SOLVENT AIR EMISSIONS

UTC surpassed its 2015 air chemical emissions reduction target of 68 percent, reducing use of more than 70 targeted chemicals during 2006-2015. Our progress in this area resulted in a revised approach for 2020, as we will now focus on a smaller number of chemicals that present the largest amount of risk to the environment. As a category, chlorinated and brominated solvents present the greatest potential impact from among the chemicals we use in our operations. Our 2020 goal prohibits air emissions from the use of eight specific chlorinated or brominated solvent chemicals if used above a level greater than 100 pounds per year. The 100-pound annual threshold is a de minimus level that will allow the use of small quantities of solvents as included in mixed chemical formulations.

WASTE RECYCLED

With more than 250 manufacturing facilities worldwide, UTC annually produces almost 300 million pounds of industrial process waste. Waste reduction has been a long-standing UTC goal, and in 2006 we began focusing on reducing the amount of our waste that is not being recycled. Our programs resulted in a 2015 recycling rate of 71 percent. Benchmark studies and comparison of peer and best-in-class industrial waste management recycling programs have led us to conclude that we can do even more, and for 2020 UTC has established a waste recycling rate goal of 90 percent.

HAZARDOUS WASTE

Reduction of UTC hazardous waste generation in the United States was one of four goals included in our first EH&S goal set established in 1991. Our focus then was on reducing regulatory compliance risk. Since 1991 our focus has evolved to include potential physical impact to the environment. Pound for pound, hazardous waste presents a much greater potential risk to the environment, human health, operating costs and UTC regulatory compliance than any other UTC waste stream. For 2020 we’ve committed to a 10 percent reduction in the amount of hazardous waste we produce as compared to our 2015 baseline performance.

WATER USE

Water availability has become an increasingly urgent issue in many locations around the world and a growing concern for some of our largest sites and their surrounding communities. UTC is committed to best-in-class EH&S management and, our 2020 goal of 25 percent reduction compared to a 2015 baseline continues a UTC water stewardship program first begun in 1997. Reducing our water use decreases our potential for business disruption due to water shortages, our regulatory compliance risk in jurisdictions struggling to provide a reliable and high quality water supply, and our costs and competition for water resources in the communities in which we operate.

WATER BEST MANAGEMENT PRACTICES

For 2020 UTC has introduced a new goal requiring our manufacturing sites to employ water management best practices (BMPs) consistent with each location’s water availability risks. At a minimum all UTC sites must have a water balance and leak detection program, regardless of size or local water availability. UTC classifies as Large Sites those that use more than 1 million gallons per year, and Small Sites are those using less than 1 million gallons per year. Depending on the size of the site and its water scarcity category (defined as extremely scarce, scarce, stressed, sufficient or abundant by the World Business Council for Sustainable Development Water Risk Tool), the site will have to implement up to eight additional BMPs. UTC has seen the benefit of these practices where they are already deployed at our sites and is confident that requiring their further adoption – in balance with local risk – will help our sites meet their water use targets and be responsible stewards of their community’s water resources.

HAZARDOUS SUBSTANCE USE

In UTC’s 2015 Clean 1 goal, in order to reduce the potential for exposure of employees to chemicals, we targeted elimination of the use of certain chemicals that required the use of a respirator eight hours per day. Our 2020 hazardous substance use goal builds on this momentum and aims to further reduce potential employee exposures to chemicals that are carcinogens, reproductive toxins and endocrine disruptors (CREs). For any CRE that in 2015 was measured at a site to be greater than 50 percent of the Occupational Exposure Limit (OEL), or deemed Very High or High risk during a Site Qualitative Exposure Assessment (QEA), the site must reduce the exposure monitoring results to less than 50 percent of the OEL and the QEA exposure risk score to Moderate or below, with the preference being to eliminate use of the CRE substance altogether. Occupational Exposure Limits (OEL) are defined as the lowest of the following: the American Conference of Governmental Industrial Hygienists Threshold Limit Values, or manufacturer recommended or regulatory exposure limit for chemical, physical and biological agents. Note that the implementation of workplace control measures (engineering controls, administrative controls, personal protective equipment) is required in situations where exposures exceed the OEL; there are no current UTC CRE exposures above the OEL.

ERGONOMIC RISK

The new 2020 Ergonomic risk goal is a leading indicator that lays the groundwork for future reductions in work-related injuries. The goal is an extension of UTC’s long-standing focus on our most material issue – the health and safety of our employees – and requires by 2020 a 50 percent reduction in the ergonomic risk of tasks assessed as High and Medium risk during the 2015 baseline period.

LEVEL I MISTAKE PROOFING

Another leading indicator incorporated into our 2020 goals – the use of Level I Mistake Proofing for fatalities, serious injuries and lost work day cases – will also increase the safety of our workforce. Level I Mistake Proofing requires the implementation of controls such that a fatal, serious or lost day incident will not recur and includes actions such as hazard isolation, chemical substitution and task redesign. This new goal requires a three-fold increase in the use of this practice as compared to 2015 baseline levels.

ADJUSTING ANNUAL TARGETS DUE TO ACQUISITIONS AND DIVESTITURES

UTC will adjust annual targets in response to acquisitions and divestitures. At the time of an acquisition we measure the acquisition’s performance in each goal area and establish a baseline year for each goal. Annual targets are then established for the acquisition for each year following the baseline and 2020, in keeping with the annual improvements defined for each goal. For example, UTC’s 2020 GHG goal is a 15 percent reduction in GHG emissions compared to the 2015 baseline, with annual targets for 2016-2020 of -3 percent. If we make an acquisition that has a baseline year of 2017, the acquisition will have -3 percent GHG reduction targets for 2018, 2019 and 2020. These targets will be integrated into UTC’s annual reporting of progress against goals.

Adjusting for divestitures works in a similar fashion. Annual targets for all divested sites will be eliminated from UTC reporting of progress against goals from the date of the divestiture to 2020.

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